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South Burnett
Community Enterprises Limited
ABN 57 113 889 768
annual report2012
Yarraman & District Community Bank®Branch
Annual report South Burnett Community Enterprises Limited 1
Chairman’s report 2
Manager’s report 3
Directors’ report 5
Auditor’s independence declaration 10
Financial statements 11
Notes to the financial statements 15
Directors’ declaration 34
Independent audit report 35
NSX report 37
Contents
Annual report South Burnett Community Enterprises Limited2
For year ending 30 June 2012
Welcome Shareholders,
Again it gives me great pleasure to present the Annual Report on behalf of South Burnett Community Enterprises. This is our seventh Report.
The main highlights this year were the gift of the car to the Graham House Foundation, the Scholarship to enable a young student from our area, to study at University and of course, the continuing Grants Programme Evening. All were very memorable occasions.
Our growth continues despite the world economic difficulties with a sound base of $80 million being touched.
The efforts of Lorraine Wyvill in turning Blackbutt around and Anne Woodrow maintaining our very successful business in Yarraman, has again been outstanding.
We are well on the path to establishing the new branch at Nanango.
Your Board has worked tirelessly to ensure that the goals of the Community Bank are met. The dedication of their time and expertise has left us in a very healthy position. Many thanks to each and every Board member.
It has been a privilege to serve as your Chairman.
Frank Smith
Chairman.
Chairman’s report
Annual report South Burnett Community Enterprises Limited 3
For year ending 30 June 2012
“At Bendigo Bank we realised long ago that to help your community become successful, we first needed to help U become successful. Because if U grow, everyone will grow with U – After all without U – there’s no us! So we’re concentrating on U – by delivering great products and services.”
It is with pleasure that I present the seventh Annual Report and results for the financial year ending 30 June 2012 on behalf of the Yarraman & District Community Bank® Branch and Blackbutt branch.
In what was yet another very challenging year in the financial world, I am pleased to report to the Board and shareholders that Yarraman & District Community Bank® Branch and the Blackbutt branch were still able to achieve some excellent outcomes.
Both branches have continued to perform well this year with the following portfolio of funds under management. Considering the challenges given the economic downturn the branches were still able to return a positive result.
Yarraman June 2011 June 2012 % Increase
Deposits $22,828,000 20,892,000 (8.48%)
Loans $36,892,000 $40,170,000 8.88%
Other Business $1,828,000 $1,759,000 (3.77%)
Total Funds Under Management $61,548,000 $62,821,000 2.068%
Blackbutt June 2011 June 2012 % Increase
Deposits $3,130,000 $4,829,000 54.28%
Loans $4,719,000 $6,784,000 43.78%
Other Business $108,000 Nil
Total Funds Under Management $7,957,000 $11,613,000 45.94%
Combined Total: $69,505,000 $74,434,000 7.09%
I would just like to congratulate the staff from both branches on achieving such excellent results.
The above growth resulted in the branch generating good profits each month which enabled us to once again contribute vital funding back to our local communities, by way of sponsorships, community grants and donations.
Following on from the success of our 2011 Community Grants Program, we were delighted to budget and invest $30,000 in funding for our 2012 Grant Program to 10 successful Community Groups. ($35,000 has been budgeted for 2013).
On the evening of our Grants presentation, we were also delighted to announce the funding of a vehicle for Graham House Community Centre which is an accredited Transport Provider with Queensland Transport and offers a range of transport options for transport of disadvantaged people of the South Burnett Region. The cost of this project was $33,182.
In 2011/12, South Burnett Community Enterprises Limited adopted Bendigo and Adelaide Bank’s Student Scholarship Program which has enabled us to sponsor a deserving local year 12 student with $5,000 towards their studies
Manager’s report
Annual report South Burnett Community Enterprises Limited4
Company Achievements 2011/2012 financial year:
South Burnett Community Enterprises Limited won the 2011 Community Bank® Achievement Award. The award recognises the significant achievement in business growth and profitability while engaging and assisting local youth.
South Burnett Community Enterprises Limited prides itself at being at the forefront of Director education, to help the future capacity of their company and developing significant relationships with Government.
The 2011/2012 financial year also saw the company pay our shareholders their second dividend of 4.5%.
Staff
Our staff continue to provide outstanding service to all of our customers and are our most valued asset.
I would like to take this opportunity to congratulate Lorraine Wyvill on her promotion to Branch Manager of Blackbutt. Congratulations to Lorraine and herteam of Cindy Rohlf and Nerrida Roberts for their dedication and commitment to the continued success of our Blackbutt branch.
To my wonderful staff at Yarraman, I am fortunate to have the support of a great team. I thank them for their commitment to the Bendigo Way of banking and congratulate them on their fine achievements in providing exceptional customer service, and for the happy and hardworking environment they have created.
I personally would like to thank and congratulate, June Dugdell, Cheryl Nix, and Joanne Collett for what they achieved last financial year and for their dedication and commitment to the success of their branch. I would like to welcome Daniel Mead who has recently joined our team in Yarraman.
It would also like to acknowledge the continued support of our Regional Manager, Garth Seymour, our Business Banker, Wayne Swadling, our Financial Planner Katie Alifrangis and our Community Support Officers in Brisbane. I thank you all.
Board Support
A big thank you to the Board for all of their support throughout the year. I congratulate our Chairman Frank Smith and each Director for their commitment and dedication to the success of both branches.
And, of course there are our customers and shareholders. They have made a vital contribution in putting their faith in Yarraman & District Community Bank® Branch and Blackbutt branch and, in return, are enjoying the exceptional customer service that our Community Bank® branches have become renowned for.
It has been another successful year and we look forward to continued success in the future with the ongoing support of our Community.
Anne Woodrow
Branch Manager
Manager’s report (continued)
Annual report South Burnett Community Enterprises Limited 5
For the financial year ended 30 June 2012
Your directors submit the financial statements of the company for the financial year ended 30 June 2012.
Directors
The names and details of the company’s directors who held office during or since the end of the financial year:
Francis Edward Smith
ChairmanAge: 72RetiredFormer exporter of livestock before moving into specialist funds management roles.Special responsibilities: - Finance, Audit and GovernanceInterest in shares: 11,334
Ross Christopher Begent
DirectorAge: 59ManagerBusiness Management & Counselling/Business, Tourism & Event Management Diploma of Management.Special responsibilities: Corporate Governance,Strategic PlanningInterests in shares: 4,502
James Alan Beveridge
TreasurerAge: 37Chartered AccountantWorked in public accounting since 1993, now a Chartered Accountant dealing with small to medium enterprises.Special responsibilities: Audit, Due Diligence Interests in shares: 3,000
David Francis Robison
SecretaryAge: 63Retired30 years experience in the Motor Vehicle finance industry in management positions. A very active member in the Blackbutt community.Special responsibilities: SecretaryInterests in shares: 6,417
David Wayne Emms
DirectorAge: 68RetiredFormer manufacturer/ builder. Chairman of Yarraman Community Council and Chairman of Colours of Yarraman Festival.Special responsibilities: BuildingsInterests in shares: 1,336
Noel Leslie Strohfeld
DirectorAge: 71Company Director/Grazier30 years in local government including 11 years as mayor. Licensed motor dealer and member of CoMSEQ rural futures taskforce and growth management & planning committee.Special responsibilities: ProjectsInterests in shares: 2,003
Directors’ report
Annual report South Burnett Community Enterprises Limited6
Brenton Lester McLennan
Vice ChairmanAge: 61ElectricianOwner of Breaker Electrical Pty Ltd, member of the Blackbutt Golf Club executive and former councillor with the Nanango Shire Council between 1991-1997. Special responsibilities: Human resourcesInterests in shares: 22,334
Jeffrey Bruce Connor
Director Age: 55 Medical Center Practice ManagerMasters in Education Administration. Principal of schools for 20 years. Chairman of the Blackbutt and Benarkin Aged Care Association and Bloomin Beautiful Blackbutt Festival Inc. Justice of the Peace.Special responsibilities: Sponsorship and Marketing,Public RelationsInterests in shares: 10,667
Ross Michael Towell
DirectorAge: 51Business OwnerPart of the Nanango Community Bank project since inception in 2008 .Owner/Editor of the Country Focus Newspaper and past President of Nanango Tourism and Development Association. Involved in many community organisations.Special responsibilities: Nanango Steering CommitteeInterests in shares: Nil
Directors were in office for this entire year unless otherwise stated.
No directors have material interests in contracts or proposed contracts with the company.
Company Secretary
David Robison was appointed to the position of company secretary on 7 December 2010, replacing Ross Begent who had been the company secretary since the company’s establishment. David has many years experience in the financial industry, managing several large offices within a finance company.
Principal Activities
The principal activities of the company during the course of the financial year were in facilitating Community Bank® services under management rights to operate franchised branches of Bendigo and Adelaide Bank Limited.
There has been no significant changes in the nature of these activities during the year.
Operating Results
Operations have continued to perform in line with expectations. The profit/(loss) of the company for the financial year after provision for income tax was:
Year ended 30 June 2012
$
Year ended 30 June 2011
$
14,193 (30,010)
Directors’ report (continued)
Annual report South Burnett Community Enterprises Limited 7
Remuneration Report
No director receives remuneration for services as a company director or committee member.
There are no employees who are directly accountable and have responsibility for the strategic direction and operational management of the entity.
There are therefore no specified executives whose remuneration requires disclosure.
Dividends
No dividends were declared or paid for the previous year and the directors recommend that no dividend be paid for the current year.
Dividends
Year Ended 30 June 2012
Cents $
Dividends paid in the year 4.50 39,651
Significant Changes in the State of Affairs
The directors’ supported the conduct of a feasibility study to determine the viability of opening a third branch in Nanango. Following positive indications from the feasibility study it was decided to proceed with preparation of a prospectus for the purposes of raising capital for the establishment of the third branch. The prospectus has now been prepared and issued to the public. This decision may affect the operations of the company and the results of those operations or state of affairs of the company in future years.
In the opinion of the directors there were no other significant changes in the state of affairs of the company that occurred during the financial year under review not otherwise disclosed in this report or the financial statements.
Matters Subsequent to the End of the Financial Year
There are no matters or circumstances that have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company, in future years.
Likely Developments
South Burnett Community Enterprises Limited are in the process of opening a new branch in Nanango. A feasibility study has been conducted with Bendigo Bank agreeing to a franchise agreement with South Burnett Community Enterprises Limited at Nanango. A Prospectus is currently being prepared.
Environmental Regulation
The company is not subject to any significant environmental regulation.
Directors’ Benefits
No director has received or become entitled to receive, during or since the financial year, a benefit because of a contract made by the company, controlled entity or related body corporate with a director, a firm which a director is a member or an entity in which a director has a substantial financial interest except as disclosed in note 20 to the financial statements. This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by directors shown in the company’s accounts, or the fixed salary of a full-time employee of the company, controlled entity or related body corporate.
Directors’ report (continued)
Annual report South Burnett Community Enterprises Limited8
Indemnification and Insurance of Directors and Officers
The company has indemnified all directors and the manager in respect of liabilities to other persons (other than the company or related body corporate) that may arise from their position as directors or manager of the company except where the liability arises out of conduct involving the lack of good faith.
Disclosure of the nature of the liability and the amount of the premium is prohibited by the confidentiality clause of the contract of insurance. The company has not provided any insurance for an auditor of the company or a related body corporate.
Directors’ Meetings
The number of directors meetings attended by each of the directors of the company during the year were:
Director
Board Meetings Attended
Elig
ible
Att
ende
d
Francis Edward Smith 10 10
Ross Christopher Begent 10 9
James Alan Beveridge 10 10
David Francis Robison 10 9
David Wayne Emms 10 10
Noel Leslie Strohfeld 10 7
Brenton Lester McLennan 10 7
Jeffrey Bruce Connor 10 10
Ross Michael Towell 10 9
Non Audit Services
The company may decide to employ the auditor on assignments additional to their statutory duties where the auditor’s expertise and experience with the company are important. Details of the amounts paid or payable to the auditor (Andrew Frewin & Stewart) for audit and non audit services provided during the year are set out in the notes to the accounts.
The board of directors has considered the position, in accordance with the advice received from the audit committee and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Directors’ report (continued)
Annual report South Burnett Community Enterprises Limited 9
Non Audit Services (continued)
The directors are satisfied that the provision of non-audit services by the auditor, as set out in the notes did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
● all non-audit services have been reviewed by the audit committee to ensure they do not impact on the impartiality and objectivity of the auditor;
● none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risk and rewards.
Auditors’ Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 10.
Signed in accordance with a resolution of the board of directors at Yarraman, Queensland on 13 August 2012.
Francis Edward Smith, Chairman James Alan Beveridge , Treasurer
Directors’ report (continued)
Annual report South Burnett Community Enterprises Limited10
Auditor’s independence declaration
Annual report South Burnett Community Enterprises Limited 11
The accompanying notes form part of these financial statements.
Statement of Comprehensive Income for the Year Ended 30 June 2012
Note 2012 2011 $ $
Revenues from ordinary activities 4 860,371 766,218
Employee benefits expense (437,323) (429,690)
Charitable donations, sponsorship, advertising and promotion (92,991) (77,659)
Occupancy and associated costs (71,797) (70,762)
Systems costs (40,615) (41,162)
Depreciation and amortisation expense 5 (47,751) (44,702)
Finance costs 5 (65) (71)
General administration expenses (152,838) (140,724)
Profit/(loss) before income tax (expense)/credit 16,991 (38,552)
Income tax (expense)/credit 6 (2,798) 8,542
Profit/(loss) after income tax (expense)/credit 14,193 (30,010)
Total comprehensive income for the year 14,193 (30,010)
Earnings per share (cents per share) c c
- basic for profit for the year 1.61 (3.41)
Financial statements
Annual report South Burnett Community Enterprises Limited12
The accompanying notes form part of these financial statements.
Balance Sheet as at 30 June 2012
Note 2012 2011 $ $
ASSETS
Current Assets
Cash and cash equivalents 7 115,653 88,656
Trade and other receivables 8 81,529 69,725
Current tax asset 11 7,813 14,022
Total Current Assets 204,995 172,403
Non-Current Assets
Property, plant and equipment 9 306,319 333,841
Intangible assets 10 124,377 142,373
Deferred tax assets 11 18,056 19,135
Total Non-Current Assets 448,752 495,349
Total Assets 653,747 667,752
LIABILITIES
Current Liabilities
Trade and other payables 12 42,047 34,683
Provisions 14 51,370 35,229
Total Current Liabilities 93,417 69,912
Non-Current Liabilities
Provisions 14 10,662 17,567
Total Non-Current Liabilities 10,662 17,567
Total Liabilities 104,079 87,479
Net Assets 549,668 580,273
Equity
Issued capital 15 676,621 681,768
Accumulated losses 16 (126,953) (101,495)
Total Equity 549,668 580,273
Financial statements (continued)
Annual report South Burnett Community Enterprises Limited 13
The accompanying notes form part of these financial statements.
Statement of Changes in Equity for the Year Ended 30 June 2012
Issued Retained Total Capital Earnings Equity $ $ $
Balance at 1 July 2010 685,110 (71,485) 613,625
Total comprehensive income for the year - (30,010) (30,010)
Transactions with owners in their capacity
as owners:
Shares issued during period 3,250 - 3,250
Costs of issuing shares (6,592) - (6,592)
Dividends provided for or paid - - -
Balance at 30 June 2011 681,768 (101,495) 580,273
Balance at 1 July 2011 681,768 (101,495) 580,273
Total comprehensive income for the year - 14,193 14,193
Transactions with owners in their capacity
as owners:
Shares issued during period - - -
Costs of issuing shares (5,147) - (5,147)
Dividends provided for or paid - (39,651) (39,651)
Balance at 30 June 2012 676,621 (126,953) 549,668
Financial statements (continued)
Annual report South Burnett Community Enterprises Limited14
Statement of Cashflows for the Year Ended 30 June 2012
Note 2012 2011 $ $
Cash Flows From Operating Activities
Receipts from customers 941,391 824,525
Payments to suppliers and employees (875,972) (811,284)
Interest received 4,184 5,565
Interest paid (65) (71)
Income taxes (paid)/refunded 4,490 (18,442)
Net cash provided by operating activities 17 74,028 293
Cash Flows From Investing Activities
Payments for property, plant and equipment (2,233) (35,960)
Payments for intangible assets - (69,983)
Net cash used in investing activities (2,233) (105,943)
Cash Flows From Financing Activities
Proceeds from issues of shares (5,147) 3,250
Payment for share issue costs - (6,592)
Dividends paid (39,651) -
Net cash used in financing activities (44,798) (3,342)
Net increase/(decrease) in cash held 26,997 (108,992)
Cash and cash equivalents at the beginning of the financial year 88,656 197,648
Cash and cash equivalents at the end of the financial year 7(a) 115,653 88,656
The accompanying notes form part of these financial statements.
Financial statements (continued)
Annual report South Burnett Community Enterprises Limited 15
For year ended 30 June 2012
Note 1. Summary of Significant Accounting Policies
a) Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standard Boards and the Corporations Act 2001. The company is a for-profit entity for the purpose of preparing the financial statements.
Compliance with IFRS
These financial statements and notes comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. These areas involving a higher degree of judgement or complexities, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
Historical cost convention
The financial statements have been prepared under the historical cost convention on an accruals basis as modified by the revaluation of financial assets and liabilities at fair value through profit or loss and where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.
Comparative figures
Where required by Australian Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.
Adoption of new and revised Accounting Standards
None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2011 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. The adoption of the revised AASB 124 Related Party Disclosures has not resulted in the disclosure of any additional related party transactions in the current period or any prior period and is not likely to affect future periods. The adoption of AASB 1054 Australian Additional Disclosures and AASB 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project have not affected the disclosure of any items in the financial statements.
The company has not elected to apply any pronouncements before their mandatory operative date in the annual reporting period beginning 1 July 2011.
Economic dependency - Bendigo and Adelaide Bank Limited
The company has entered into a franchise agreement with Bendigo and Adelaide Bank Limited that governs the management of the Community Bank® branch at Yarraman and Blackbutt Queensland.
Notes to the financial statements
Annual report South Burnett Community Enterprises Limited16
Note 1. Summary of Significant Accounting Policies (continued)
a) Basis of Preparation (continued)
Economic dependency - Bendigo and Adelaide Bank Limited (continued)
The branch operates as a franchise of Bendigo and Adelaide Bank Limited, using the name “Bendigo Bank” and the logo and system of operations of Bendigo and Adelaide Bank Limited. The company manages the Community Bank® branch on behalf of Bendigo and Adelaide Bank Limited, however all transactions with customers conducted through the Community Bank® branches are effectively conducted between the customers and Bendigo and Adelaide Bank Limited.
All deposits are made with Bendigo and Adelaide Bank Limited, and all personal and investment products are products of Bendigo and Adelaide Bank Limited, with the company facilitating the provision of those products. All loans, leases or hire purchase transactions, issues of new credit or debit cards, temporary or bridging finance and any other transaction that involves creating a new debt, or increasing or changing the terms of an existing debt owed to Bendigo and Adelaide Bank Limited, must be approved by Bendigo and Adelaide Bank Limited. All credit transactions are made with Bendigo and Adelaide Bank Limited, and all credit products are products of Bendigo and Adelaide Bank Limited.
Bendigo and Adelaide Bank Limited provides significant assistance in establishing and maintaining the Community
Bank® branch franchise operations. It also continues to provide ongoing management and operational support, and other assistance and guidance in relation to all aspects of the franchise operation, including advice in relation to:
• advice and assistance in relation to the design, layout and fit out of the Community Bank® branch;
• training for the branch manager and other employees in banking, management systems and interface protocol;
• methods and procedures for the sale of products and provision of services;
• security and cash logistic controls;
• calculation of company revenue and payment of many operating and administrative expenses
• the formulation and implementation of advertising and promotional programs; and
• sales techniques and proper customer relations.
The following is a summary of the material accounting policies adopted by the company in the preparation of the financial statements. The accounting policies have been consistently applied, unless otherwise stated.
b) Revenue
Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefit will flow to the company and any specific criteria have been met. Interest and fee revenue is recognised when earned. The gain or loss on disposal of property, plant and equipment is recognised on a net basis and is classified as income rather than revenue. All revenue is stated net of the amount of Goods and Services Tax (GST).
Revenue calculation
The franchise agreement with Bendigo and Adelaide Bank Limited provides for three types of revenue earned by the company. First, the company is entitled to 50% of the monthly gross margin earned by Bendigo and Adelaide Bank Limited on products and services provided through the company that are regarded as “day to day” banking business (ie ‘margin business’). This arrangement also means that if the gross margin reflects a loss (that is, the gross margin is a negative amount), the company effectively incurs, and must bear, 50% of that loss.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 17
Note 1. Summary of Significant Accounting Policies (continued)
b) Revenue (contiuned)
Revenue calculation (continued)
The second source of revenue is commission paid by Bendigo and Adelaide Bank Limited on the other products and services provided through the company (ie ‘commission business’). The commission is currently payable on various specified products and services, including insurance, financial planning, common fund, Sandhurst Select, superannuation, commercial loan referrals, products referred by Rural Bank, leasing referrals, fixed loans and certain term deposits (>90 days). The amount of commission payable can be varied in accordance with the Franchise Agreement (which, in some cases, permits commissions to be varied at the discretion of Bendigo and Adelaide Bank Limited). This discretion has be exercised on several occasions previously. For example in February 2011 Bendigo and Adelaide Bank Limited reduced commissions on two core banking products to ensure a more even distribution of income between Bendigo and Adelaide Bank Limited and its Community Bank® partners. The revenue share model is subject to regular review to ensure that the interests of Bendigo and Adelaide Bank Limited and Community Bank® companies remain balanced.
The third source of revenue is a proportion of the fees and charges (ie, what are commonly referred to as ‘bank fees and charges’) charged to customers. This proportion, determined by Bendigo and Adelaide Bank Limited, may vary between products and services and may be amended by Bendigo and Adelaide Bank Limited from time to time.
c) Income Tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the balance sheet liability method on temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax and when the balances relate to taxes levied by the same taxation authority and the company entity intends to settle its tax assets and liabilities on a net basis.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited18
Note 1. Summary of Significant Accounting Policies (continued)
c) Income Tax (continued)
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates to items credited or debited to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.
d) Employee Entitlements
Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.
The company contributes to a defined contribution plan. Contributions to employee superannuation funds are charged against income as incurred.
e) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
f) Trade Receivables and Payables
Receivables are carried at their amounts due. The collectability of debts is assessed at balance date and specific provision is made for any doubtful accounts. Liabilities for trade creditors and other amounts are carried at cost that is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the company.
g) Property, Plant and Equipment
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated at the rate equivalent to the available building allowance using the straight line method. The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
• leasehold improvements 40 years
• plant and equipment 2.5 - 40 years
• furniture and fittings 4 - 40 years
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 19
Note 1. Summary of Significant Accounting Policies (continued)
h) Intangibles
The franchise fee paid to Bendigo and Adelaide Bank Limited has been recorded at cost and is amortised on a straight line basis over the life of the franchise agreement.
The establishment fee paid to Bendigo and Adelaide Bank Limited when renewing the franchise agreement has also been recorded at cost and is amortised on a straight line basis over the life of the franchise agreement.
i) Payment Terms
Receivables and payables are non interest bearing and generally have payment terms of between 30 and 90 days.
j) Borrowings
All loans are initially measured at the principal amount. Interest is recognised as an expense as it accrues.
k) Financial Instruments
Recognition and initial measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transaction costs. Financial instruments are classified and measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset.
Classification and subsequent measurement
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.
(ii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the entity’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.
(iii) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited20
Note 1. Summary of Significant Accounting Policies (continued)
k) Financial Instruments (continued)
Impairment
At each reporting date, the entity assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the statement of comprehensive income.
l) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership are transferred to the company are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.
m) Provisions
Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions of other past events, it is probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation.
A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or before the reporting date.
n) Contributed Equity
Ordinary shares are recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
o) Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
p) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis.
The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 21
Note 2. Financial Risk ManagementThe company’s activities expose it to a limited variety of financial risks: market risk (including currency risk, fair value interest risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the entity. The entity does not use derivative instruments.
Risk management is carried out directly by the board of directors.
(i) Market risk
The company has no exposure to any transactions denominated in a currency other than Australian dollars.
(ii) Price risk
The company is not exposed to equity securities price risk as it does not hold investments for sale or at fair value. The company is not exposed to commodity price risk.
(iii) Credit risk
The company has no significant concentrations of credit risk. It has policies in place to ensure that customers have an appropriate credit history. The company’s franchise agreement limits the company’s credit exposure to one financial institution, being Bendigo and Adelaide Bank Limited.
(iv) Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and marketable securities and the availability of funding from credit facilities. The company believes that its sound relationship with Bendigo and Adelaide Bank Limited mitigates this risk significantly.
(v) Cash flow and fair value interest rate risk
Interest-bearing assets are held with Bendigo and Adelaide Bank Limited and subject to movements in market interest. Interest-rate risk could also arise from long-term borrowings. Borrowings issued at variable rates expose the company to cash flow interest-rate risk. The company believes that its sound relationship with Bendigo and Adelaide Bank Limited mitigates this risk significantly.
(vi) Capital management
The board’s policy is to maintain a strong capital base so as to sustain future development of the company. The board of directors monitor the return on capital and the level of dividends to shareholders. Capital is represented by total equity as recorded in the balance sheet.
In accordance with the franchise agreement, in any 12 month period, the funds distributed to shareholders shall not exceed the distribution limit.
(i) the distribution limit is the greater of:
(a) 20% of the profit or funds of the franchisee otherwise available for distribution to shareholders in that 12 month period; and
(b) subject to the availability of distributable profits, the relevant rate of return multiplied by the average level of share capital of the franchisee over that 12 month period; and
(ii) the relevant rate of return is equal to the weighted average interest rate on 90 day bank bills over that 12 month period plus 5%.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited22
Note 2. Financial Risk Management (continued)
(vi) Capital management (continued)
The board is managing the growth of the business in line with this requirement. There are no other externally imposed capital requirements, although the nature of the company is such that amounts will be paid in the form of charitable donations and sponsorship. Charitable donations and sponsorship paid for the year ended 30 June 2012 can be seen in the statement of comprehensive income.
There were no changes in the company’s approach to capital management during the year.
Note 3. Critical Accounting Estimates and JudgementsEstimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.
Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.
Taxation
Judgement is required in assessing whether deferred tax assets and certain tax liabilities are recognised on the balance sheet. Deferred tax assets, including those arising from un-recouped tax losses, capital losses and temporary differences, are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future sales volumes, operating costs, capital expenditure, dividends and other capital management transactions. Judgements are also required about the application of income tax legislation.
These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amount of recognised deferred tax assets and liabilities may require adjustment, resulting in corresponding credit or charge to the statement of comprehensive income.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience and the condition of the asset is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 23
Note 3. Critical Accounting Estimates and Judgements (continued)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the company’s share of the net identifiable assets of the acquired branch/agency at the date of acquisition. Goodwill on acquisition is included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
The calculations require the use of assumptions.
Impairment of assets
At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets that have an indefinite useful life to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited24
2012 2011 $ $
Note 4. Revenue from Ordinary ActivitiesOperating activities:
- services commissions 854,803 761,435
Total revenue from operating activities 854,803 761,435
Non-operating activities:
- interest received 5,568 4,783
Total revenue from non-operating activities 5,568 4,783
Total revenues from ordinary activities 860,371 766,218
Note 5. ExpensesDepreciation of non-current assets:
- plant and equipment 29,882 13,737
- leasehold improvements (128) 15,301
Amortisation of non-current assets:
- franchise agreement 2,426 2,022
- franchise establishment/renewal fee 15,571 13,642
47,751 44,702
Finance costs:
- interest paid 65 71
Bad debts 7,441 3,418
Note 6. Income Tax ExpenseThe components of tax expense comprise:
- Current tax 5,217 -
- Future income tax benefit attributed to losses - (3,435)
- Movement in deferred tax (2,355) (5,068)
- Recoupment of prior year tax loss 3,435 -
- Over provision of tax in the prior period (3,499) (39)
2,798 (8,542)
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 25
Note 2012 2011 $ $
Note 6. Income Tax Expense (continued)
The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to the income tax expense/(credit) as follows:
Operating profit 16,991 (38,552)
Prima facie tax on profit from ordinary activities at 30% 5,097 (11,565)
Add tax effect of:
- non-deductible expenses 1,200 4,699
- timing difference expenses 2,355 5,068
- other deductible expenses - (1,637)
8,652 (3,435)
Movement in deferred tax 11 (2,355) (5,068)
Over provision of tax in the prior period (3,499) (39)
2,798 (8,542)
Note 7. Cash and Cash EquivalentsCash at bank and on hand 44,956 32,830
Term deposits 70,697 55,826
115,653 88,656
The above figures are reconciled to cash at the end of the financial year as shown in the statement of cashflows as follows:
Note 7.(a) Reconciliation of cash
Cash at bank and on hand 44,956 32,830
Term deposits 70,697 55,826
Bank overdraft 13 - -
115,653 88,656
Note 8. Trade and Other ReceivablesTrade receivables 67,629 59,989
Other receivables and accruals 1,847 462
Prepayments 12,053 9,274
81,529 69,725
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited26
2012 2011 $ $
Note 9. Property, Plant and EquipmentPlant and equipment
At cost 98,099 95,867
Less accumulated depreciation (39,114) (24,479)
58,985 71,388
Leasehold improvements
At cost 294,810 294,810
Less accumulated depreciation (47,476) (32,357)
247,334 262,453
Total written down amount 306,319 333,841
Movements in carrying amounts:
Plant and equipment
Carrying amount at beginning 71,388 83,032
Additions 2,232 2,093
Less: depreciation expense (14,635) (13,737)
Carrying amount at end 58,985 71,388
Leasehold improvements
Carrying amount at beginning 262,453 276,756
Additions - 999
Less: depreciation expense (15,119) (15,302)
Carrying amount at end 247,334 262,453
Total written down amount 306,319 333,841
Note 10. Intangible AssetsFranchise fee
At cost 72,130 72,130
Less: accumulated amortisation (64,448) (62,022)
7,682 10,108
Establishment/Renewal processing fee
At cost 77,853 77,853
Less: accumulated amortisation (31,432) (15,862)
46,421 61,991
Goodwill 70,274 70,274
Total written down amount 124,377 142,373
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 27
2012 2011 $ $
Note 11. TaxCurrent:
Income tax payable/(refundable) (7,813) (14,022)
Non-Current:
Deferred tax assets
- employee provisions 18,610 15,839
- tax losses carried forward - 3,435
18,610 19,274
Deferred tax liability
- accruals (554) (139)
Net deferred tax asset 18,056 19,135
Movement in deferred tax charged/(credited) to statement of
comprehensive income 1,079 (8,503)
Note 12. Trade and Other PayablesTrade creditors 38,747 31,383
Other creditors and accruals 3,300 3,300
42,047 34,683
Note 13. ProvisionsCurrent:
Provision for annual leave 33,671 35,229
Provision for long service leave 17,699 -
51,370 35,229
Non-Current:
Provision for long service leave 10,662 17,567
Number of employees at year end 6 6
Note 14. Contributed Equity881,128 Ordinary shares fully paid (2011: 881,128) 739,350 739,350
Less: equity raising expenses (62,729) (57,582)
676,621 681,768
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited28
Note 14. Contributed Equity (continued)
Rights attached to shares
(a) Voting rights
Subject to some limited exceptions, each member has the right to vote at a general meeting.
On a show of hands or a poll, each member attending the meeting (whether they are attending the meeting in person or by attorney, corporate representative or proxy) has one vote, regardless of the number of shares held. However, where a person attends a meeting in person and is entitled to vote in more than one capacity (for example, the person is a member and has also been appointed as proxy for another member) that person may only exercise one vote on a show of hands. On a poll, that person may exercise one vote as a member and one vote for each other member that person represents as duly appointed attorney, corporate representative or proxy.
The purpose of giving each member only one vote, regardless of the number of shares held, is to reflect the nature of the company as a community based company, by providing that all members of the community who have contributed to the establishment and ongoing operation of the Community Bank® have the same ability to influence the operation of the company.
(b) Dividends
Generally, dividends are payable to members in proportion to the amount of the share capital paid up on the shares held by them, subject to any special rights and restrictions for the time being attaching to shares. The franchise agreement with Bendigo and Adelaide Bank Limited contains a limit on the level of profits or funds that may be distributed to shareholders. There is also a restriction on the payment of dividends to certain shareholders if they have a prohibited shareholding interest (see below).
(c) Transfer
Generally, ordinary shares are freely transferable. However, the directors have a discretion to refuse to register a transfer of shares.
Subject to the foregoing, shareholders may transfer shares by a proper transfer effected in accordance with the company’s constitution and the Corporations Act.
Prohibited shareholding interest
A person must not have a prohibited shareholding interest in the company.
In summary, a person has a prohibited shareholding interest if they control or own 10% or more of the shares in the company (the “10% limit”).
As with voting rights, the purpose of this prohibited shareholding provision is to reflect the community-based nature of the company.
Where a person has a prohibited shareholding interest, the voting and dividend rights attaching to the shares in which the person (and his or her associates) have a prohibited shareholding interest, are suspended.
The board has the power to request information from a person who has (or is suspected by the board of having) a legal or beneficial interest in any shares in the company or any voting power in the company, for the purpose of determining whether a person has a prohibited shareholding interest. If the board becomes aware that a member has a prohibited shareholding interest, it must serve a notice requiring the member (or the member’s associate) to dispose of the number of shares the board considers necessary to remedy the breach. If a person fails to comply with such a notice within a specified period (that must be between three and six months), the board is authorised to sell the specified shares on behalf of that person. The holder will be entitled to the consideration from the sale of the shares, less any expenses incurred by the board in selling or otherwise dealing with those shares.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 29
Note 14. Contributed Equity (continued)
Prohibited shareholding interest (continued)
In the constitution, members acknowledge and recognise that the exercise of the powers given to the board may cause considerable disadvantage to individual members, but that such a result may be necessary to enforce the prohibition.
2012 2011 $ $
Note 15. Retained Earnings/Accumulated LossesBalance at the beginning of the financial year (101,495) (71,485)
Net profit from ordinary activities after income tax 14,193 (30,010)
Dividend paid during the financial year (39,651) -
Balance at the end of the financial year (126,953) (101,495)
Note 16. Statement of CashflowsReconciliation of profit/(loss) from ordinary activities after tax to net cash provided by operating activities
Profit from ordinary activities after income tax 14,193 (30,010)
Non cash items:
- depreciation 29,882 29,038
- amortisation 17,869 15,664
Changes in assets and liabilities:
- (increase)/decrease in receivables (11,804) 1,502
- (increase)/decrease in other assets 7,288 (8,503)
- increase/(decrease) in payables 7,364 (1,964)
- increase in provisions 9,236 13,047
- increase/(decrease) in current tax liabilities - (18,481)
Net cashflows provided by operating activities 74,028 293
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited30
2012 2011 $ $
Note 17. LeasesOperating lease commitments
Non-cancellable operating leases contracted for but not capitalised in the financial statements
Payable - minimum lease payments
- not later than 12 months 37,407 41,069
- between 12 months and 5 years 105,132 106,652
- greater than 5 years - -
142,539 147,721
The lease on the Yarraman branch premises is a non-cancellable lease with a five-year term which expires in 2015. Annual rent is currently $33,862 plus GST.
The lease on the Blackbutt branch premises is a non-cancellable lease with a five-year term which expires in November 2012. An option to renew the lease for a further 5 term is available. Annual rent is currently $8,509 plus GST.
Note 18. Auditors’ RemunerationAmounts received or due and receivable by the auditor of the company for:
- audit and review services 4,500 4,500
- share registry services 4,064 1,897
- non audit services 5,680 6,310
14,244 12,707
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 31
Note 19. Director and Related Party DisclosuresThe names of directors who have held office during the financial year are:
Francis Edward Smith
Ross Christopher Begent
James Alan Beveridge
David Francis Robison
David Wayne Emms
Noel Leslie Strohfeld
Brenton Lester McLennan
Jeffrey Bruce Connor
Ross Michael Towell
Except for James Beveridge and Ross Towell, no director or related entity has entered into a material contract with the company. No director’s fees have been paid as the positions are held on a voluntary basis.
James Beveridge is a director at Beveridge Carey Accountants Pty Ltd which supplied the company with accounting and taxation services during the financial year. During the financial year the total benefit received by Beveridge Carey Accountants Pty Ltd was $22,795 (2011:$17,622).
Ross Towell is the owner/editor of Country Focus newspaper which provided advertising for the company during the financial year. During the financial year the total benefit received by Country Focus was $6,204 (2010:$3,282).
Directors’ Shareholdings 2012 2011
Francis Edward Smith 11,344 11,344
Ross Christopher Begent 4,502 4,502
James Alan Beveridge 3,000 3,000
David Francis Robison 6,417 6,417
David Wayne Emms 1,336 1,336
Noel Leslie Strohfeld 2,003 2,003
Brenton Lester McLennan 22,334 22,334
Jeffrey Bruce Connor 10,667 10,667
Ross Michael Towell - -
There was no movement in directors’ shareholdings during the year.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited32
2012 2011 $ $
Note 20. Dividends Paida. Dividends paid during the year
Current year final dividend
100% (2011: 100%) Un franked dividend - 4.5 cents (2011: Nil) per share 39,651 -
b. Franking account balance
Franking credits available for subsequent reporting periods are:
- franking account balance as at the end of the financial year 13,953 18,443
- franking debits that will arise from a refund of income tax as at the end of the financial year (7,813) (14,022)
- franking debits that will arise from the payment of dividends recognised as a liability at the end of the financial year - -
Franking credits available for future financial reporting periods: 6,140 4,421
- franking debits that will arise from payment of dividends proposed or declared before the financial report was authorised for use but not recognised as a distribution to equity holders during the period - -
Net franking credits available 6,140 4,421
Note 21. Key Management Personnel DisclosuresNo director of the company receives remuneration for services as a company director or committee member.
There are no executives within the company whose remuneration is required to be disclosed.
2012 2011 $ $
Note 22. Earnings Per Share(a) Profit attributable to the ordinary equity holders of the
company used in calculating earnings per share 14,193 (30,010)
Number Number
(b) Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 880,701 880,701
Note 23. Events Occurring After the Balance Sheet DateThere have been no events after the end of the financial year that would materially affect the financial statements.
Note 24. Contingent LiabilitiesThere were no contingent liabilities at the date of this report to affect the financial statements.
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited 33
Note 25. Segment ReportingThe economic entity operates in the service sector where it facilitates Community Bank® services in Yarraman and Blackbutt, Queensland pursuant to a franchise agreement with Bendigo and Adelaide Bank Limited.
Note 26. Registered Office/Principal Place of BusinessThe registered office and principal place of business is:
Registered Office Principal Place of Business 23 Toomey Street 23 Toomey Street YARRAMAN QLD 4614 YARRAMAN QLD 4614
Note 27. Financial Instruments
Net Fair Values
The net fair values of financial assets and liabilities approximate the carrying values as disclosed in the balance sheet. The company does not have any unrecognised financial instruments at the year end.
Credit Risk
The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount of those assets as disclosed in the balance sheet and notes to the financial statements.
There are no material credit risk exposures to any single debtor or group of debtors under financial instruments entered into by the economic entity.
Interest Rate Risk
Fina
ncia
l in
stru
men
t Floating interest rate
Fixed interest rate maturing in
Non interest bearing
Weighted average effective
interest rate1 year or less Over 1 to 5 years Over 5 years
2012$
2011$
2012$
2011$
2012$
2011$
2012$
2011$
2012$
2011$
2012%
2011%
Financial Assets
Cash and cash equivalents
44,555 32,388 70,697 55,826 - - - - 400 442 2.39 3.88
Receivables - - - - - - - - 67,629 59,989 N/A N/A
Financial Liabilities
Interest bearing liabilities
- - - - - - - - - - N/A N/A
Payables - - - - - - - - 37,263 31,383 N/A N/A
Notes to the financial statements (continued)
Annual report South Burnett Community Enterprises Limited34
In accordance with a resolution of the directors of South Burnett Community Enterprises Limited, we state that:
In the opinion of the directors:
(a) the financial statements and notes of the company are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2012 and of its performance for the financial year ended on that date; and
(ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
(c) the audited remuneration disclosures set out in the remuneration report section of the directors’ report comply with Accounting Standard AASB124 Related Party Disclosures and the Corporations Regulations 2001.
This declaration is made in accordance with a resolution of the board of directors.
Francis Edward Smith, Chairman James Alan Beveridge , Treasurer
Signed on the 13th August 2012.
Directors’ declaration
Annual report South Burnett Community Enterprises Limited 35
Independent audit report
Annual report South Burnett Community Enterprises Limited36
Independent audit report (continued)
Annual report South Burnett Community Enterprises Limited 37
South Burnett Community Enterprises Limited is a public Company incorporated in Australia and listed on the National Stock Exchange of Australia (NSX).
Shareholding
The following table shows the number of shareholders, broken into various categories showing the total number of shares held.
Number of shares held Number of shareholders Number of shares held
1 to 1,000 189 122528
1,001 to 5,000 142 303589
5,001 to 10,000 20 146672
10,001 to 100,000 17 308339
100,001 and over 0 0
Total shareholders 368 881,128
Equity securities
Each of the above shareholders are entitled to 1 vote, irrespective of the number of shares held.
There are no substantial shareholders (holding more than 5% of voting rights) as each shareholder is entitled to 1 vote. Normally holding more than 5% of total issued shares would create a substantial shareholder, but this is not applicable due to the voting restrictions for the company.
There are 11 shareholders holding less than a marketable parcel of shares ($500 in value).
There are no restricted securities on issue.
All shares on issue are ordinary shares fully paid to $1 per share. There are no unquoted equity securities.
Ten largest shareholders
The following table shows the 10 largest shareholders.
ShareholderNumber of fully
paid shares heldPercentage of issued capital
Mr John B Adams 34000 4
Mr Kerry Claude Wyvill 31667 3.59
Rosalie Shire Council 26667 3.03
Nathan Gordon Daly 26667 3.03
Anthony John Tilden 20000 2.27
Barry Francis Blunt & Dorothy May Blunt 20000 2.27
Fay Ellen Green 17334 1.97
John Leslie Green 17333 1.97
NSX report
Annual report South Burnett Community Enterprises Limited38
Ten largest shareholders (continued)
ShareholderNumber of fully
paid shares heldPercentage of issued capital
Valma Goodman 15000 1.70
Mr James Norman Fowler & Mrs Elizabeth Anne Fowler 13334 1.51
Mr Paul Bernard Charlton & Mrs Janice Maree Charlton 13334 1.51
Mr Graeme Arthur Hanisch & Mrs Elizabeth Ann Hanisch 13334 1.51
John Hyslop <Hyslop Family S/Fund A/C> 13334 1.51
Malcolm Charles Finlayson & Skene Malcolm Finlayson & Michael William Finlayson <Finlaysons Founding S/F A/C>
13334 1.51
275,338 31
Registered office and principal administrative office
The registered office of the company is located at: 23 Toomey Street Yarraman Queensland 4614 Phone: (07) 41638162
The principal administrative office of the company is located at: 23 Toomey Street Yarraman Queensland 4614 Phone: (07) 41638162
Security register
The security register (share register) is kept at: 61-65 Bull Street BENDIGO VICTORIA 3550 Phone: (03) 5443 0344
Company Secretary
<First and Last Name> has been the company Secretary of <Name> Community Financial Services Limited for <xx> years. <First Name> qualifications and experience include . . .
Corporate governance
The company has implemented various corporate governance practices, which include:
(a) The establishment of an audit committee. Members of the audit committee are <First and Last Names of committee members>
(b) Director approval of operating budgets and monitoring of progress against these budgets;
(c) Ongoing Director training; and
(d) Monthly Director meetings to discuss performance and strategic plans.
NSX report (continued)
Annual report South Burnett Community Enterprises Limited 39
Annexure 3
There are no material differences between the information in the company’s Annexure 3 and the information in the financial documents in its Annual Report.
5 Year summary of performance
2008 $
2009 $
2010 $
2011 $
2012 $
Gross revenue 419,529 498,981 690,880 766,218 860,371
Net profit before tax 51,036 51,642 46,612 -38,552 16,991
Total assets 342,660 357,550 740,048 667,752 653,737
Total liabilities 52,998 64,192 126,423 87,479 104,079
Total equity 289,662 293,358 613,625 580,273 549,668
NSX report (continued)
Yarraman & District Community Bank®Branch 23 Toomey Street, Yarraman QLD 4614Phone: (07) 4163 8162
Blackbutt Branch 49A Coulson Street, Blackbutt QLD 4306 Phone: (07) 4163 0734
Franchisee: South Burnett Community Enterprises Limited 23 Toomey Street, Yarraman QLD 4614Phone: (07) 4163 8162 ABN: 57 113 889 768
www.bendigobank.com.au/yarraman (KKQAR12014) (09/12)